A Critical Shariah and Maqasid Appraisal of Islamic Credit Cards

Islamic banks and financial institutions have recently started issuing Islamic credit cards as substitutes for conventional credit cards after the Shariah scholars, due to the Riba involved, unanimously deemed the traditional credit cards unlawful. However, Islamic credit cards have different structures; some have been structured based on Eina or Tawarruq sales even though these two types of deals were ruled unlawful by the Fiqh academies. However, the most common structure of Islamic credit cards is the Ijarah model, where the card issuer is deemed a lessor of the services embedded in the credit card, apart from the provision of credit, against fixed periodical fees. Although this structure seems acceptable from a Shariah point of view and has been endorsed by the Shariah boards of the issuing Islamic banks, it involves some issues that must be carefully addressed. The paper elaborates on these critical issues and analyses the different contractual relationships involved in these cards to outline the prospectus of a genuine Shariah-compliant credit card.